Acciona has launched legal action to get out of its contract on Macquarie’s $700 million waste-to-energy project in Kwinana, claiming it has been hamstrung by Western Australia’s border rules.
The lead contractor on Macquarie’s $700 million waste-to-energy project in Kwinana has launched legal action to get out of its contract, claiming it has been hamstrung by Western Australia’s tough border rules.
At the centre of the lawsuit is the engineering and construction contract Spanish multinational company Acciona was awarded for the Avertas Energy project in 2018, which was set to treat 400,000 tonnes of waste annually and produce 36 megawatts of electricity.
The development, earmarked for Kwinana’s Industrial Precinct, was the product of a joint venture between Macquarie Capital and Phoenix Energy and was slated to be the first of its kind in Australia.
By the following year, the company had announced that its three-year construction phase had officially begun, with more than 800 jobs to be created.
The project was scheduled to be operational by 2021, but it appeared to have stalled (with the structure still surrounded by scaffolding at year's end).
In October last year, Acciona’s industrial and construction arms, along with its wholly-owned subsidiary, John Beever Australia, filed a legal claim in NSW against project owning entity Kwinana WTE Project Co to get out of the contract.
The action hinged on the COVID-19 pandemic and the state government’s subsequent border closures meeting the definition of a force majeure event, a term that protects Acciona from liability in the face of an unavoidable catastrophe that affects its ability to fulfil its obligations.
Acciona is seeking a declaration from the court confirming that to be the case.
The parties gathered at the WA Supreme Court this morning to establish where the case should go from here.
The court was told the action would rely on the exploration of various state government documents that “affect the passage of persons to WA”, which lawyers for Kwinana WTE claim is an area of potential factual controversy.
While travel under the state government’s strict border arrangement may have created additional paperwork and “hoops to jump through”, Kwinana WTE’s lawyers argued that it did not prevent people from crossing the border, especially workers.
Acciona’s legal counsel Jeremy Giles told the court Acciona was looking to expedite the legal action, but Justice Marcus Solomon warned the company may not get the speedy trial it was hoping for, given the definition was complicated and its exploration did not lend itself to a short and sharp action.
In foreshadowing the need to establish the parameters of the case, lawyers for the Kwinana WTE revealed the dispute was one of several between the two parties and even flagged the possibility of a counterclaim.
The matter is scheduled to return to court on March 29, with a three-day provisional hearing likely to proceed in June.
Acciona has been contacted for comment.
The Kwinana WTE project was one of a suite of Acciona's WA-based projects, which include the other waste-to-energy project in East Rockingham and the Bunbury Outer Ring Road (the state's largest regional infrastructure project).
It also holds contracts for the construction of the state government's $253 million Bayswater Station upgrade and Kenwick Freight Facility.
